WOW has acquired Knology, confirming earlier reports that the two were negotiating a merger.

The purchase price is precisely what Knology was expecting: $1.5 billion; $750 million of that is a cash payment of $19.75 a share, and the other half is the assumption of $750 million in debt. The money is being put up by Avista Capital Partners, an investment bank founded in 2007 that has a controlling interest in WOW.

Knology is currently a publicly traded company. When the deal closes, the merged entity will be privately held.

Knology has more than 275,000 broadband subscribers, which means WOW is paying roughly $3,000 per sub. That compares to other recent big acquisitions, such as Cablevision’s purchase of Bresnan and Time Warner Cable’s purchase of Insight, both of which were in the $4,000-per-sub range.

WOW is not commenting on who will manage the merged company, according to WOW chief marketing officer Kathy Kuo.

The WOW-Knology combination creates a company with more than 800,000 subscribers, which would rank it as the 13th-largest of the country’s multichannel video programming distributors (MVPDs) and the 9th-largest cable operator.

Knology operates in 13 markets scattered across the Southeast and Midwest – in Alabama, Florida, Iowa, Kansas and Tennessee. WOW has systems in Michigan, Illinois, Ohio and Indiana. WOW purchased some of those systems in the last year from Broadstripe.

“Our two companies have much in common. We share similar beliefs in how employees and customers should be treated, and we both know how to succeed in competitive environments. WOW and Knology are a natural fit; together, our people, network and operating infrastructure will combine to provide a strong platform for continued growth,” said WOW CEO and Chair Colleen Abdoulah.

Both companies have been aggressively updating their networks. Knology recently wrapped a network upgrade and said it is embarking on a program to distribute DTAs in order to reclaim analog bandwidth.

WOW has likewise upgraded to DOCSIS 3.0, and earlier this year it began distributing Arris’ Moxi gateways as the vehicle for a set of new services, including multi-room DVR.